Which combination of factors would most likely shift the ADI curve to the right?
A) An increase in household indebtedness and a decrease in foreign demand for products.
B) An increase in consumer wealth and a decrease in interest rates.
C) An increase in personal taxes and a decrease in government spending.
D) An increase in business taxes and a decrease in profit expectations.
E) An increase in demand for foreign products and an increase in interest rates.

Question

Quizplus · Accepted Answer

An increase in consumer wealth would lead to a higher level of consumption, shifting the ADI curve to the right. Similarly, a decrease in interest rates would lower borrowing costs and encourage investment, leading to an increase in overall demand and the rightward shift of the ADI curve. None of the other options listed would cause a rightward shift of the ADI curve.

Which Combination of Factors Would Most Likely Shift the ADI